Note 5 - Reserve for Title Claims

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Insurance Disclosure [Text Block]

5. Reserve for Title Claims

NCTIC’s reserves for unpaid losses and loss adjustment expenses are established using estimated amounts required to settle claims for which notice has been received (reported) and the amount estimated to be required to satisfy claims that have been incurred but not yet reported (“IBNR”). Despite the variability of such estimates, management believes that the total reserve for claims is adequate to cover claim losses which might result from pending and future claims under title insurance policies issued through September 30, 2025. We continually update loss reserve estimates as new information becomes known, new loss patterns emerge or as other contributing factors are considered and incorporated into the analysis of reserve for claim losses. Due to the uncertainty inherent in the process and to the judgment used by management, the ultimate liability may be greater or less than our current reserves. If actual claims loss development varies from what is currently expected and is not offset by other factors, it is possible that additional reserve adjustments may be required in future periods in order to maintain our recorded reserve within a reasonable range of our actuary's central estimate.

A reconciliation of the activity in the reserves account for the nine-month periods ended September 30, 2025 and 2024 is as follows (in thousands): 

	For the Nine			For the Nine
	Months Ended			Months Ended
	September 30, 2025			September 30, 2024
Beginning Reserves	$	637		$	313
Provision for claims related to:
Current year		188			102
Prior years		(67	)		-
Total provision for claim losses		121			102
Claims paid related to:
Current year		-			-
Prior years		76			-
Total title claims paid		76			-
Ending Reserves	$	682		$	415

At September 30, 2025, there were no reinsurance recoverables on paid claims or unpaid reserves.

For the three months ended September 30, 2025, the Company recognized favorable title claims loss and loss adjustment expense development of $34,000 attributable to insured events of the prior years as a result of estimation of the reserve for claims loss and loss adjustment expenses. For the nine months ended September 30, 2025, the Company recognized an additional $15,000 net provision for title claims loss and loss adjustment expense attributable to insured events of the prior years as a result of estimation of the reserve for claims loss and loss adjustment expenses. Original estimates of ultimate loss exposures are decreased or increased as additional information becomes known during the adjustment process regarding individual claims.

A summary of the Company’s loss reserves at September 30, 2025 and December 31, 2024 is as follows (in thousands):

	As of September 30, 2025		As of December 31, 2024
Known title claims	$	65	$	114
IBNR title claims		617		523
Total title claims		682		637
Non-title claims		-		-
Total title claims reserves	$	682	$	637